Posted on 11/02/2004 2:47:00 AM PST by Cincinatus' Wife
Auto industry analysts predict that by as early as 2007, Toyota — the world's second-largest automaker — will increase production capacity at several of its six North American assembly plants, including the Tundra truck plant under construction in San Antonio.
Sources knowledgeable about Toyota's manufacturing decisions said Monday that Toyota's San Antonio plant and its plants in Mexico and in Canada would be the most likely choices for expansion because those plants have smaller production capacities than Toyota's three other North American plants.
Toyota Motor Corp. officials have indicated recently that within a few years Toyota may begin production in North America of its popular Prius sedan and other gas-electric hybrid vehicles under development.
But industry analysts also expect Toyota to add additional North American plant capacity for current and future nonhybrid cars and trucks.
On Monday, the Associated Press reported Toyota Chairman Horoshi Okuda said the Japanese automaker will boost worldwide production, including adding another North American plant if sales here continue to be strong.
Dennis Cuneo, senior vice president of Toyota's North American arm, said Toyota isn't actively looking for new North American locations. Cuneo said Toyota would first enlarge an existing plant before adding an additional location.
Toyota, whose first North American plant opened in Georgetown, Ky. in 1988, has a history of starting small and then growing quickly. Georgetown started with a 200,000 vehicle annual capacity and now can produce 500,000 vehicles and 500,000 engines a year.
But Georgetown and Toyota's plants in Princeton, Ind., and Freemont, Calif. — at 300,000 and 400,000 vehicles respectively — are at what Toyota considers optimum capacity. Instead of expanding them further, Toyota is expected to consider its three smaller plants in Baja California; Cambridge, Ontario; and the San Antonio plant, scheduled for a fall 2006 opening.
San Antonio's planned capacity of 150,000 vehicles would make it Toyota's smallest in North America.
Analysts say Toyota likely would enlarge it in one of two ways: It could add production of a vehicle new to this market, including as-yet unannounced versions of the Tundra full-size pickup. Or Toyota — which has previously altered the mix at its North American plants at the same time it increased manufacturing capacity here — could shift production to San Antonio from another plant tapped to get a new product.
The San Antonio plant's construction plans show a space designated for future expansion.
"I think what you'll see transpire is they will get San Antonio up and running for 18 months, then get another facility up and running there in 2008," said Mike Wall, an auto analyst with CSM Worldwide Inc. in Farmington Hills, Mich.
Analyst Jeffrey K. Liker, a University of Michigan engineering professor, said he doesn't expect Toyota will increase production capacity of the San Antonio plant by consolidating all of Tundra's current North American production there.
Toyota also makes the Tundra in Princeton, which produced just over 100,000 of the full-size trucks in 2003. The San Antonio plant's 150,000-capacity is designated for a bigger version of the Tundra, which will debut in 2006.
"They seem to like to have two sources for one vehicle; it gives them more security," said Liker, author of the book "The Toyota Way."
But if the bigger Tundra proves popular, analyst Joe Phillippi said, Toyota might enlarge the San Antonio plant to add capacity for that model or more versions of the Tundra.
"If the new truck is very successful, clearly they'll easily double the size of that facility," Phillippi said. "That 150,000 capacity really isn't efficient. Normally you want to be at 250,000 capacity."
Wall expects Toyota to add small-car production, perhaps of the Toyota Echo, at Baja California in 2007. That plant makes Tacoma truck beds and will add production of the Tacoma truck soon.
Wall also predicted Toyota by 2007 will add production of its 4Runner SUV — currently made only in Japan — possibly by adding capacity at its Mexico plant. Wall expects Toyota would by 2007 increase North American production of the Corolla compact sedan, currently made in Fremont, Calif., by building another plant in Cambridge, Ontario.
While auto analysts are busy handicapping which plant will be expanded and with what new product, one thing they all agree on: "I think you will see a steady rollout of plants," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.
Toyota Chairman Okuda's Monday comments came as Toyota reported an unexpected drop in second-quarter profits. The decline was partly due to a stronger yen, but it also reinforced Toyota's strategy of producing vehicles in the countries where they're sold to minimize currency fluctuation impacts and cut delivery times.
Toyota also wants to capitalize on strong U.S. sales, which rose almost 9 percent through September from the same period a year ago. U.S. sales of the Prius, for which there's a waiting list of as long as six months in some markets, increased 225 percent through September.
Toyota has already said it will double the number of Prius hybrids for sale in the United States next year to about 100,000 by increasing Japanese production by 50 percent. But officials with Toyota Motor Sales USA, Toyota's sales and marketing arm, want the automaker to add North American production of the Prius and other hybrids in the pipeline like the Lexus RX400h SUV.
"We're lobbying our parent company that we would like to see this," Toyota Motor Sales spokesman Mike Michels said.
Toyota wouldn't necessarily put all its North American hybrid production at one plant. In Japan, Toyota builds the Prius on a mixed assembly line with four other car models. And production of the Prius and of other hybrids available only in Japan is spread among several plants.
Thanks for the info.However,I would like to see Toyota
sell and manufacture here in the U.S., their diesel-powered
vehicles that are used in the Bahamas and other countries.
A small truck named the Hilux,the Corolla,and Highlander are
some of the vehicles with diesel engines sold overseas.I
had a 1984 2650 lb. Corolla 4 door hatchback for 15 years
that I used as a second car-38mpg city,50mpg highway.Now
Toyota has a diesel engine that will exceed the 2006 clean
diesel fuel requirements using the present diesel fuel.No
need for hybrids with engines like this.Coal is our most
abundant fuel resource.We should take advantage of it.
I have no objection to Toyotas in a strictly rational sense. They just don't make anything that excites me (Mustang, Focus, Magnum, 5-series, etc. - cars with character). They make boring boxes that are really just Japanese Buicks.
HONDA !
True enough, but what conceivable relationship does this have to Diesel-powered vehicles?
You aren't under the misconception that Diesel fuel comes from coal, are you?
Rudolf Diesel's first engine worked on powdered coal. (Historical trivia.)
The only problem I have had is with the dealerships. Atlantic Toyota in Lynn, Massachusetts tried to screw me after they fk'ed up installing my waterpump.
Lexington Toyota tried to screw me after I lost my car's remote control. They charged me $70 for the remote and tried to charge me another $70 to program it. "Programming" is a 5 minute job involving pressing a "Reset" button on the alarm's ECM. Real con artists, I won't be back.
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